Italian Prime Minister Silvio Berlusconi lashed out at the Goldstone report on Wednesday during a special session at the Knesset, saying that the UN report on last winter's Operation Cast Lead tried to "incriminate Israel for its legitimate response" to Palestinian rocket attacks.

The Italian leader also said the world "cannot accept" a nuclear-armed Iran. 

From the podium of the Knesset, Berlusconi called on the international community to pursue stronger sanctions against Teheran, which Italy, like Israel and the West, suspects is developing nuclear weapons.

"We cannot accept the nuclearization of a country whose leaders have explicitly expressed their desire to destroy Israel, have denied the Holocaust and delegitimized the Jewish state," Berlusconi said, in remarks translated into Hebrew simultaneously.

"We cannot make compromises," he said. "The path that must be taken is multilateral oversight, negotiations and sanctions" against Iran.

Berlusconi has repeatedly criticized the Islamic Republic during his three-day visit to Israel. On Tuesday, he announced that Italy had cut business ties with Iran by a third since 2007, noting that Italian energy giant ENI had decided not to extend an existing contract to develop an important oil field in Iran.

Berlusconi's speech before lawmakers, an honor bestowed on few world leaders, was a sign of the friendship between the two nations that has grown much closer under his stewardship.

The Italian leader drew a warm round of applause when he declared: "We, the free and liberal people across the world, thank you (Israel) for your very existence."

Berlusconi expressed hope that Israel and the Palestinians would soon resume peace talks.

Before Berlusconi spoke, Prime Minister Benjamin Netanyahu hailed him "as a courageous leader who always stands by Israel's side."

He concluded a speech filled with praise for Berlusconi with a story of a heavily pregnant Italian woman who confronted a German officer during World War II and, at great peril to her own life, persuaded him to let an arrested Jewish woman go.

This woman's actions "saved the life of the Jewish woman and cast, if only for a brief moment, a scintilla of humanity and courage upon the great darkness that enveloped the whole of Europe at that time," Netanyahu said.

"That courageous woman's name was Rosa. And one of her children is called Silvio Berlusconi, today the prime minister of Italy," the prime minister said.

Netanyahu concluded his remarks by telling Berlusconi that, "We appreciate you. We embrace you. We love you.”

The two men embraced, and the Italian leader took out a white handkerchief to wipe tears from his eyes.

Wednesday marked the second anniversary of Rosa Bossi Berlusconi's death.

Opposition leader Tzipi Livni (Kadima) also spoke at the Knesset, welcoming Italy's continued support of Israel. "When Israel is facing difficult times, it sees those who remain silent, ignore, or criticize - as well as those who are doing the right thing without hesitation or vacillation, and you are one of the few who has expressed, in a clear and strong voice, the deep cooperation between Italy and Israel," she said.

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